Why Are People Leaving California?
In 2005, California faced a migration dilemma: for every 100 people that were moving into California, 160 people moved out. This high rate of out-migration has since been reduced, but this is still an issue for the Californian economy. So just who is leaving California, and why?
In 2012, Proposition 30 was passed in California. It made it so residents that earned over $1 million each year had to pay a 13.3 % rate in taxes, the highest in the country. Many people say ‘who cares?’ since the rich only make up 1% of the Californian population. But these rich residents pay 41% of California’s income taxes, while half of the state pays no income tax at all! They are a crucial part of re-building California.
As income taxes are rising for the upper class, some are leaving the state. However, it is lower income residents that are more likely to leave. They are moving to places like Texas where taxes are low, jobs are plentiful, and the quality of living is affordable. Between 2005 and 2011, California lost 158 people with incomes of less than $20,000 for every 100 people that moved into the state. California is losing more residents than it is gaining, and this is becoming an increasing problem.
California’s high unemployment rate, high taxes, and high home prices are making it undesirable for US citizens. In fact, expensive real estate is the number one issue for Californians. Statistics show that the highest rate of out-migration from the state occurred when home prices in CA were more expensive in relation to other states – in 2004, 2005, and 2006.
As California is trying to save its economy with higher taxes and home prices, it is ultimately pushing its residents out – upper and lower class alike. We must watch the trends to see how this will affect California’s population in the long run.
If you enjoyed this post, get email updates and exclusive content from us by subscribing below to our email list (it’s free).